A Comparative Report of Supermarket shopping behaviour for Potato Products in the North West Region

1
A Comparative Report of Supermarket shopping
behaviour for Potato Products in the North West
Region and UK. (2007)

• David E. Yawson
• dunnhumby Academy of Consumer Research
• Kent Business School, University of Kent

2
Contents

• Objectives
• The dunnhumby Academy
• The data
• Analysis
• Conclusions

3
Objectives
4
Objectives

• The objectives of this report are twofold
• To provide an overview of comparative supermarket
  purchasing behaviour for potato product
  categories in the UK with the North West Region.
• To identify potential opportunities for market
  development and segmentation for the North West
  Region meat producers.

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The dunnhumby Academy of Consumer Research
6
dunnhumby Academy of Consumer Research

• Structure
• Joint venture between Kent Business School and
  dunnhumby, launched in April 2005
• Mission
• Expand the use of consumer insight amongst
  farmers and small food processors, to improve
  their prospects in an increasingly competitive
  environment, through targeted market and product
  development informed by research undertaken by
  PhD students, funded by organisations
  representative of different commodity sectors and
  regions
• Primary areas of research
• Market segmentation
• Demand management

7
The Data
8
The Data

• Representative of UK supermarket shoppers
• Population Panel of 12m supermarket shoppers
• 40 of UK households
• Sample 10
• 1.2 million households
• Over 265,000 product items
• 30,000 food
• Up to 4yrs of weekly data
• 80 of sales transactions

9
The Data

• Three approaches to segmentation
• Lifestage
• older adults, younger families, older families,
  young adults, pensioners
• Lifestyle
• Finer foods, Healthy, Price sensitive,
  Convenience, Mainstream, Traditional
• TV advertising region
• London, Midlands, South East, Wales the West,
  East of England, Lancashire, Scotland, Yorkshire,
  South West, Northern Ireland, North East

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Distribution of lifestage segments
shoppers
Age family
Lifestage segment
Adults aged 20-39 with no children
Young Adults
15
Adults aged 40-59 with no children
Older Adults
14
Adults with all children under 10
Young families
17
Adults with one or more child over 10
Older families
16
Adults over 60 with no children
Pensioners
11
Multigenerational households
Mixed
28
11
Distribution of lifestyle segments
shoppers
Key Characteristics
Lifestyle segment
time conscious, enjoy luxury products and are
willing to experiment
Finer Foods
16
interested in organic, environmental benefits,
low fat/sugar and calorie conscious
Healthy
10
regard food as fuel, are busy and rely heavily on
the microwave
Convenience
21
look primarily for value and rely on staple foods
Price Sensitive
17
have broad tastes, favour established brands and
are influenced by the needs of children
Mainstream
25
enjoy the art of cooking but rely on a fixed
shopping list so less likely to buy on impulse
Traditional
11
12
Shopper Lifestyles
13
Distribution of regional segments
shoppers
shoppers
Region
Region
Scotland
London
20
7
12
6
Midlands
Yorkshire
11
South West
4
Southern England
Northern Ireland
9
Wales the West
3
9
East of England
2
North East
8
Lancashire
14
Analysis
15
What do you need to know?

• Two key questions
• What opportunities exist for market development?
• What opportunities exist for new product
  development?

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What do you need to know?

• What opportunities exist for market development?
• Increase penetration (attract new consumers)
• Focus on stimulating trial purchase (e.g. special
  offers, free samples)
• Increase purchase frequency (get existing
  consumers to buy more often)
• Focus on stimulating new uses (e.g. recipe ideas,
  meal occasions)

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What do you need to know?

• What opportunities exist for new product
  development?
• Which consumer segments under/over perform with
  respect to existing products
• Over-performing segments are likely to buy new
  product variants so they are low risk segments to
  target but competition is already high
• Under-performing segments are less interested in
  existing products so they represent potential
  targets that are higher risk (because they may
  not like new variants either) but potentially
  higher return as there is less competition

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Main Categories

• Potato Fries
• Potato Crisps
• Potato Chips
• Organic Potato Products
• Other Potato Products

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Key Measures

• The number of products
• Gives an indication of how mature the range or
  category is and the opportunity for new product
  introductions
• Customer penetration
• of households who have purchased at least one
  of the products from the specified range at least
  once during the specified period (52 wks)
• Frequency of purchase
• The average number of times consumers of one or
  more of the products from the specified range
  purchase them over the specified period (52wks)

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Key Measures

• Category share
• The share of each product range in the sales of
  the category as a whole
• Shows the relative importance of different
  product ranges
• Growth
• The change in the volume and value of sales for
  the current period (52wks) over the preceding
  period (52wks)
• Based on continuous panel of shoppers (i.e.
  ignores growth due to increase/decrease in the
  number of shoppers over the specified time
  period)

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Key Measures Potato Products(52 Wks, 12-Jun-06
to 10-Jun-07)

• High number of products, customer penetration
  and relative high frequency of purchase suggest a
  matured sector.

22
Key Measures Potato Products(52 Wks, 12-Jun-06
to 10-Jun-07)

• High growth rates in the organic sector present
  scope for product innovation.

23
Index of sales Totals of Potato Products (104
Wks, 13-Jun-05 to 10-Jun-07)
24
Index of sales Potato Fries Products(104 Wks,
13-Jun-05 to 10-Jun-07)
25
Index of sales Potato Crisps Products(104 Wks,
13-Jun-05 to 10-Jun-07)
26
Index of sales Potato Chips Products(104 Wks,
13-Jun-05 to 10-Jun-07)
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Index of sales Other Potato Products(104 Wks,
13-Jun-05 to 10-Jun-07)
28
Index of sales Organic Potato Products(104 Wks,
13-Jun-05 to 10-Jun-07)
29
Shopper segmentation

• For the purpose of this report, the segmentation
  analysis is based on sales for the 12 weeks from
  19-Feb-2007 to 13-May-2007.
• The data is presented in index form, with 100
  representing the average for all supermarket
  shoppers
• Over-indexing segments purchase
  disproportionately high volumes of the products
  they find them appealing
• Under-indexing segments purchases
  disproportionately low volumes of the products
  they do not find them appealing
• In the analysis that follows, particular
  attention is drawn to consumer segments which
  over-index or under-index by at least 10

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Lifestage segmentation

• Young families over-indexed in the organic ,
  chips, crisps and fries categories in the North
  West and UK.
• Older Families over-indexed in the chips,
  crisps and fries categories in the North West and
  UK.
• Pensioners under indexed in all categories
  especially the fries in both the North West and
  UK.

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Lifestage segmentation Potato Products(UK) (12
wks, 19-Mar-07 to 10-Jun-07)
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Lifestage segmentation Potato Products (NW) (12
wks, 19-Mar-07 to 10-Jun-07)
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Lifestage segmentation Potato Fries Products
(UK) (12 wks, 19-Mar-07 to 10-Jun-07)
34
Lifestage segmentation Potato Fries Poultry
Products (NW) (12 wks, 19-Mar-07 to 10-Jun-07)
35
Lifestage segmentation Potato Crisps Products
(UK) (12 wks, 19-Mar-07 to 10-Jun-07)
36
Lifestage segmentation Potato Crisps Poultry
Products (NW) (12 wks, 19-Mar-07 to 10-Jun-07)
37
Lifestage segmentation Potato Chips Products
(UK) (12 wks, 19-Mar-07 to 10-Jun-07)
38
Lifestage segmentation Potato Chips Products
(NW) (12 wks, 19-Mar-07 to 10-Jun-07)
39
Lifestage segmentation Organic Potato Products
(UK) (12 wks, 19-Mar-07 to 10-Jun-07)
40
Lifestage segmentation Organic Potato Products
(NW) (12 wks, 19-Mar-07 to 10-Jun-07)
41
Lifestage segmentation Other Potato Products
(UK) (12 wks, 19-Mar-07 to 10-Jun-07)
42
Lifestage segmentation Other Potato Products
(NW) (12 wks, 19-Mar-07 to 10-Jun-07)
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Lifestyle segmentation

• Potato chips and fries categories attracts
  Convenience shoppers in the in the North West
  and UK.
• Organic potato products appeals to Finer Foods
  shoppers in the North West and UK.
• Potato Crisps products appeals to Mainstream
  and Price Sensitive shoppers.

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Lifestyle segmentation Potato Products(UK)(12
wks, 19-Mar-07 to 10-Jun-07)
45
Lifestyle segmentation Potato Products (NW)(12
wks, 19-Mar-07 to 10-Jun-07)
46
Lifestyle segmentation Potato Fries Products
(UK) (12 wks, 19-Mar-07 to 10-Jun-07)
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Lifestyle segmentation Potato Fries Products
(NW) (12 wks, 19-Mar-07 to 10-Jun-07)
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Lifestyle segmentation Potato Crisps Products
(UK) (12 wks, 19-Mar-07 to 10-Jun-07)
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Lifestyle segmentation Potato Crisps Products
(NW) (12 wks, 19-Mar-07 to 10-Jun-07)
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Lifestyle segmentation Potato Chips Products
(UK) (12 wks, 19-Mar-07 to 10-Jun-07)
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Lifestyle segmentation Potato Chips Products
(NW) (12 wks, 19-Mar-07 to 10-Jun-07)
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Lifestyle segmentation Organic Potato Products
(UK)(12 wks, 19-Mar-07 to 10-Jun-07)
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Lifestyle segmentation Organic Potato Products
(NW) (12 wks, 19-Mar-07 to 10-Jun-07
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Lifestyle segmentation Other Potato Products
(UK) (12 wks, 19-Mar-07 to 10-Jun-07)
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Lifestyle segmentation Other Potato Products
(NW) (12 wks, 19-Mar-07 to 10-Jun-07)
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Regional segmentation

• Shoppers in the North West under-indexed in all
  the product categories in the North West and UK.
• Northern Ireland over-indexed in all the product
  categories with the exception of potato chips.
• Northern Scotland over indexed in the chips
  crisps and fries categories.
• Borders over indexed in the crisps and fries
  categories.
• London under indexed in all categories with
  exception of the organic category.

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Regional segmentation Potato Products(12 wks,
19-Mar-07 to 10-Jun-07)
58
Regional segmentation Organic Potato Products
(12 wks, 19-Mar-07 to 10-Jun-07)
59
Regional segmentation Other Potato Products (12
wks, 19-Mar-07 to 10-Jun-07)
60
Regional segmentation Potato Chips Products(12
wks, 19-Mar-07 to 10-Jun-07)
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Regional segmentation Potato Crisps Products
(12 wks, 19-Mar-07 to 10-Jun-07)
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Regional segmentation Potato Fries Products
(12 wks, 19-Mar-07 to 10-Jun-07)
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CAMEO segmentation

• Wealthy retired neighbourhoods, affluent home
  owners, young affluent singles and smaller
  private family homes in the UK over- indexed in
  the organic products category whereas only the
  wealthy retired neighbourhoods, affluent home
  owners and smaller private family homes did so
  in the North west.
• Poorer council tenants-many single parents over
  indexed in the potato chips, crisps and fries
  categories in the North West and only in the
  potato crisps category.
• Poorer family and single parent households
  over-indexed in the potato crisps and fries
  categories in the UK but under indexed in all
  categories in the North West.

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CAMEO Potato Products(UK) (12 wks, 19-Mar-07
to 10-Jun-07)
65
CAMEO Potato Products(NW) (12 wks, 19-Mar-07
to 10-Jun-07)
66
CAMEO Organic Potato Products(UK) (12 wks,
19-Mar-07 to 10-Jun-07)
67
CAMEO Organic Potato Products(NW) (12 wks,
19-Mar-07 to 10-Jun-07)
68
CAMEO Other Potato Products (UK) (12 wks,
19-Mar-07 to 10-Jun-07)
69
CAMEO Other Potato Products (NW) (12 wks,
19-Mar-07 to 10-Jun-07)
70
CAMEO Potato Chips Products(UK) (12 wks,
19-Mar-07 to 10-Jun-07)
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CAMEO Potato Chips Products(NW) (12 wks,
19-Mar-07 to 10-Jun-07)
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CAMEO Potato Crisps Products(UK) (12 wks,
19-Mar-07 to 10-Jun-07)
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CAMEO Potato Crisps Products(NW) (12 wks,
19-Mar-07 to 10-Jun-07)
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CAMEO Potato Fries Products(UK) (12 wks,
19-Mar-07 to 10-Jun-07)
75
CAMEO Potato Fries Products(NW) (12 wks,
19-Mar-07 to 10-Jun-07)
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Conclusions
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Conclusions

• Consumer insight is an essential ingredient for
  success, no matter how good the product is
• dunnhumby database offers unparalleled breadth
  and depth
• Differences in purchasing behaviour between
  segments may be significant but should not be
  assumed
• Heterogeneous segments require differential
  treatment

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Conclusions

• The more limited the (marketing) resources the
  more important it is to target them
• Over-indexing segments most receptive consumers
  (increase purchase frequency and encourage
  trading up through meal occasions and new
  product variants)
• Under-indexing segments poorly served by
  existing products (encourage trial purchase
  through re-positioning of existing products and
  development of new ones)

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Conclusions

• The analysis reveals significant differences in
  the performance (penetration, frequency of
  purchase, sales growth) and shopper profiles
  across the meat products categories.
• Further research is warranted to explore why
  different shopper segments behave the way they do
  and the opportunities for innovation, for
  example
• What can be done to increase uptake of potato
  products in the North West region across all age
  groups?
• What can be done to attract more mainstream
  shoppers to the organic potato products category?
• What can be done to attract less affluent singles
  and students to potato products in the UK since
  they under-performed in all the categories?
• Answers to these questions could provide
  invaluable information in support of targeted
  marketing, merchandising or product development
  activities

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Further Information

• This information is supplied by Food Northwest on
  the strict understanding that recipients use it
  exclusively as part of their own marketing and
  product development activities. Under no
  circumstances should the information provided be
  shared with third parties, without the prior
  consent of Food Northwest . Failure to comply
  with these requirements will result in the
  organisations involved being denied further
  access to information from the dunnhumby Academy
  and may jepeordise the subsidised access to the
  dunnhumby data for Food Northwest and its members
  in the future.

81
Further Information

• For further information about the dunnhumby
  Academy and how to access further information
  like this for your business, contact
• David E. Yawson (dey2_at_kent.ac.uk)
• Lisa Jones (lisa.jones_at_foodnw.co.uk)
• Phil Szymala (phil.szymala_at_dunnhumby.com)